Small Business Tax Savings Podcast Mastering Tax Strategies for Health Costs: How to Maximize Deductions and Save Big!
How can your health expenses actually put money back in your pocket come tax season?
We take a deep dive into a topic many of us often shy away from; Health. Today's episode is about how health intersects with your wallet. Specifically, how you can leverage health-related expenses to save on your taxes.
We dive into self-employed health insurance, tax strategies for high medical costs, employee health options, and health savings accounts. Whether you're self-employed, running an S corporation, or simply an individual trying to navigate the complex landscape of health-related deductions, today's episode promises insights that could potentially save you money!
Don’t Forget! As part of our Tax Minimization Program, we have a full section on how to go about Health Related Tax Deductions
[00:25] Determining the Health Insurance Deduction Based on Your Business
- Differences between health insurance and medical sharing plans.
- Sole Proprietor or Single Member LLC
- S Corporation Owner
- If you have non-owner employees and provide health insurance benefits, you will get a deduction for your costs for them too
[06:03] Business Owners With No Employees + High Medical Costs
- Utilize a Section 105 Plan to turn personal medical expenses into a business deduction.
[09:05] Health Benefit Options Available For Small Businesses With Employees
- Check our blog What Health Benefit Options are Available for Small Businesses With Employees?
- Options available:
- Group Health Insurance
- Increase Wages to Cover Costs (Taxable)
- Setup an HRA or QSEHRA
- For small businesses with 25 or fewer employees, we recommend the QSEHRA option
[12:54] What Is An HSA and How Do They Work?
- Read our article diving into the HSA: What Is An HSA and How Do They Work?
- You get a tax deduction for the funds you contribute into an HSA.
- Withdrawals are tax-free if used for qualified medical expenses.
- Interest or earnings within the HSA are NOT taxed.
[18:45] What Is An HSA and How Do They Work?
- As year-end approaches, our goal is to guide you through strategies to ensure you pay the least amount in taxes for 2023 legally!
- Start planning and implementing now to get deductions in 2023.
Key Quotes
“I recommend everybody, business owner or not, if you have a high deductible health plan and you qualify, you should be maxing out a health savings account in HSA." – Mike Jesowshek, CPA
“We have a lot of S Corp owners that don't think about this. They skip this process and just try to take it out on Schedule 1. The IRS could come back and disallow that.’ – Mike Jesowshek, CPA
“When I first started my business, it was tough to bring on employees because I didn't know how to handle the health insurance piece. I always thought it was complex, and super expensive. I learned about this idea of a QSEHRA, which is a great option where I didn't have to worry about a group plan.” – Mike Jesowshek, CPA
“I would hate to see small business owners avoiding growing their business or avoiding bringing on employees for the fact of health insurance when there is an option that is relatively easy, not as complex, and potentially could save you some money as well.” – Mike Jesowshek, CPA
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Podcast Host: Mike Jesowshek, CPA - Founder